Mumbai, July 2: General Electric has reached a settlement with the Centre, the Maharashtra government and Indian institutional lenders over the Dabhol power project.

Maharashtra Power Development Company (MPDCL), which holds a 15 per cent stake in Dabhol, has signed an agreement with General Electric (GE).

GE will be paid Rs 630 crore as settlement of its dues.

“We have signed release and settlement agreements with GE following which the US company has agreed to transfer its shares in DPC to us. The settlement involves a payout of Rs 630 crore to GE," senior MSEB officials said.

“Of the due amount, Rs 474.88 crore has been paid and the balance will be paid before December 31, 2005,” they said. The amount paid already has been raised by MPDCL through loans from ICICI Bank and Power Finance Corporation about 4-5 days back.

Further, both sides have agreed to withdraw all litigations and GE has agreed to help in the restart of the project, they said.

Following the agreement, GE would transfer its 42.5 per cent stake in DPC, which includes the 32.5 per cent stake of the erstwhile Enron Corporation ' awarded to it by the US court ' to the special purpose vehicle to be formed for the revival of the project.

GE president and CEO Scott Bayman said, “This has been a long and complex process that GE believes has resulted in a fair and equitable resolution of all issues related to the DPC.”

GE Energy is working closely with NTPC and Bhel to restart the phase one of the power project, complete the phase one and construct the phase two, he said.

“India is an important country to GE's global growth. We look forward to working with our partners, customers and state and central governments in helping India continue to develop into a leading world economy," Bayman said.

The agreement was signed between GE and Indian stakeholders, including MPDCL, the Maharashtra government, the Centre and Indian financial institutions, the MSEB officials said. GE would not participate in the arbitration slated to be held in London this month.

Talks are also on with the other major shareholder Bechtel to sort out the issues, they added.

With the transfer of GE’s shares to the SPV, the Indian stakeholders would have a majority 57.5 per cent stake in DPC, reducing the other existing major stakeholder Bechtel to a minority.

“Bechtel's role in the Dabhol project was minimal and since MSEB has built a strong case, we are confident of winning if Bechtel goes for arbitration slated this month," MSEB sources said.

FI sources said with the payment to foreign promoters, the phase one of the settlement process would be over and the second phase would begin when Indian lenders would be paid.

Top state electricity board officials were in New Delhi yesterday to work out a solution with GE and Bechtel over the contentious issues between the two sides.

“With the agreement reached with GE, the revival of the 2,184 mw Dabhol project ' defunct for five years now ' has been put on fast track," they said.

Even as the government had commenced negotiations to settle the claims of the foreign lenders, the authorities had also in a parallel move tried to tie-up other issues like fuel supply.